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Market Reports

The Altenex Market Report – Spring 2017: SPP Market Overview

The report is authored by the Edison Energy Supply Team: Emily Williams, Director of Supply; Mary Kate Francis, Energy Supply Associate; and Charley Hildt, Energy Supply Analyst.

This article is adapted from the Altenex Market Report – Spring 2017, a comprehensive assessment of the policy, technology, and pricing developments shaping the North American renewable energy market.

SPP Market Overview

About SPP: The Southwest Power Pool (SPP) coordinates the movement of electricity across all or part of 14 U.S. states, largely in the corridor between North Dakota and Oklahoma.

SPP expanded its territory and implemented a nodal market in 2014, encouraging the growth of C&I renewable PPAs. SPP remains dominated by coal, but wind and natural gas are growing in generation share. As wind increases its contributions to the grid, SPP is facing transmission constraints and some projects will face curtailment unless new load emerges for the wind generation to serve.

SPP at a Glance

As illustrated below, wholesale power prices in SPP dipped in 2016, but have since rebounded to a level that is expected to remain steady in the near term. Around-the-clock pricing at SPP South averaged $26.79/MWh in the past twelve months, and is expected to average $26.95/MWh in 2017, based on a combination of early 2017 prices and OTC power forwards, as of late March 2017. Going forward, forecasters expect a slow rise in wholesale power prices, due to stable demand growth and increasing natural gas prices. Scheduled coal plant retirements have the potential to further increase prices, though new wind build-outs may moderate this increase.

Historical and Futures Pricing at SPP South Hub

What are the advantages of signing a deal in SPP?
[Available only in the full report.]

What are the challenges of signing a deal in SPP?
[Available only in the full report.]

The report is available to Edison Energy clients and to select commercial, industrial and institutional entities, jointly referenced here as C&I buyers. To request a copy of the report, please contact Christen Blum, Edison Energy, at Christen.Blum@EdisonEnergy.com